Stabler v. Galloway

Filing 27

ORDER AND REASONS denying 23 Motion for Leave to File. Signed by Chief Judge Sarah S. Vance on 11/13/14. (jjs, ) Modified on 11/13/2013 (jjs, ).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ROSE STABLER

CIVIL ACTION

VERSUS

NO: 12-2528

ROBERT GALLOWAY

SECTION: R

ORDER AND REASONS
Plaintiff Rose Stabler seeks leave of court to amend her
complaint pursuant to Federal Rule of Civil Procedure 15(a) in
order to establish this Court's personal jurisdiction over
defendant Robert Galloway.

For the following reasons, the Court

DENIES plaintiff's motion.

I.

BACKGROUND
Galloway is an attorney who practices and resides in Mobile,

Alabama. Galloway represented the husband of plaintiff Rose Burch
Stabler in a tax prosecution by the IRS.1 Thereafter, Stabler
filed an action in the Circuit Court of Baldwin County, Alabama,
Stabler v. Galloway, No. 2010-900163, that alleged Galloway had
acted fraudulently when he negotiated the sale and foreclosure of
her home. The Alabama trial court granted summary judgment in

1

United States v. Stabler, CIV. A. 06-0505-CB-C, 2008 WL
5245353 (S.D. Ala. Dec. 2, 2008) report and recommendation
adopted, CIV.A. 06-0505-CB-C, 2008 WL 5567803 (S.D. Ala. Dec. 16,
2008).

favor of Galloway. The Alabama trial court's grant of summary
judgment was affirmed on appeal by the Alabama Court of Civil
Appeals, No. 2101030, and the writ of certiorari to the Supreme
Court of Alabama was stricken in No. 1110813. Stabler, proceeding
pro se, filed the current action to set aside the state court
judgment as procured through fraud on the court. Galloway moved
to dismiss Stabler's action pursuant to Federal Rule of Civil
Procedure 12(b)(2) and (3).
Stabler alleged that she was a resident of Louisiana when
her home was sold. However, the home was located in Alabama and
Galloway averred that his representation of Stabler's husband was
based exclusively in Alabama and any contact with her occurred
there. Galloway does not practice, advertise, or maintain an
office in Louisiana. Indeed, the only alleged contacts between
Galloway and Louisiana were settlement negotiations with the New
Orleans IRS office that Galloway purportedly engaged in during
his representation of Mr. Stabler. Galloway disputed that this
contact occurred, alleging instead that he negotiated exclusively
with IRS officers based in the Mobile, Alabama, and Washington,
D.C., IRS offices. Finally, Galloway alleged that he did not
enter into a contract to represent or work for Stabler, only to
represent her husband.

2

This Court dismissed the complaint for lack of personal
jurisdiction on June 17, 2013.2

On June 28, 2013, the Court

entered final judgment against Stabler and in favor of Galloway.3
Plaintiff filed this motion for leave to amend her complaint on
July 15, 2013.

She argues that Rule 15 entitles to amend her

complaint as a matter of right because she has not previously
amended the complaint and because Galloway has filed only a
motion to dismiss, which is not considered a responsive pleading
in this circuit.

Galloway disputes plaintiff's entitlement to

amend on the grounds that this Court has already entered judgment
in the case, and plaintiff has not moved to set aside or vacate
the judgment pursuant to Federal Rule of Civil Procedure 59 or
60.

He argues that plaintiff is not entitled to relief under

either Rule 15 or Rules 59 or 60 in any event.

II.

LAW AND DISCUSSION
Plaintiff cites Arena v. Graybar Elec. Co., 669 F.3d 214

(5th Cir. 2012), for the proposition that a court must examine
newly submitted evidence relating to the court's jurisdiction
even after judgment has been entered.

The comparison is

inapposite, as Arena discussed the ability of a defendant to

2

R. Doc. 21.

3

R. Doc. 22.
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attack a court's subject matter jurisdiction at any time in the
proceedings:
Proper jurisdiction for a federal court is fundamental and
necessary before touching the substantive claims of a
lawsuit. Even if defendants failed to challenge jurisdiction
at a prior stage of the litigation, they are not prohibited
from raising it later. A factual attack under Rule 12(b)(1)
may occur at any stage of the proceedings, and plaintiff
bears the burden of proof that jurisdiction does in fact
exist.
Because a party may not waive the defense of subject matter
jurisdiction, it is clear that the issue may be raised for
the first time on appeal. [T]he independent establishment of
subject-matter jurisdiction is so important that [even] a
party ostensibly invoking federal jurisdiction may later
challenge it as a means of avoiding adverse results on the
merits.
A litigant generally may raise a court's lack of subject
matter jurisdiction at anytime in the same civil action,
even initially at the highest appellate instance. The law is
clear on this point and the district court had a duty to
consider newly submitted evidence despite the defendants's
failure to produce it before the entry of judgment.
Id. at 223 (internal citations and quotation marks omitted).
Here, plaintiff seeks to amend in order to establish
jurisdiction, rather than to prove that it does not exist.
Moreover, unlike subject matter jurisdiction, the requirement of
personal jurisdiction is a waivable right.

Fed. R. Civ. P.

12(h); PaineWebber Inc. v. Chase Manhattan Private Bank
(Switzerland), 260 F.3d 453, 462 (5th Cir. 2001).

In other

words, a court in some circumstances has the power to hear a case
even when it lacks jurisdiction over the defendant.

The same is

not true when the court lacks jurisdiction over the case itself.
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This distinction explains the Arena court's departure from the
general rule, discussed below, that a plaintiff may not amend as
of right after dismissal of her claim.
Federal Rule of Civil Procedure 15 permits a party to amend
her complaint:
once as a matter of course within:
(A) 21 days after serving it, or
(B) if the pleading is one to which a responsive pleading is
required, 21 days after service of a responsive pleading or
21 days after service of a motion under Rule 12(b), (e), or
(f), whichever is earlier.
Fed. R. Civ. P. 15(a)(1).4

In all other cases, a party must

obtain the opposing party's written consent or the court's leave.
Fed. R. Civ. P. 15(a)(2).

Plaintiff filed this motion on July

15, 2013, approximately six months after Galloway filed his Rule
12(b) motion to dismiss for lack of personal jurisdiction.
Therefore, plaintiff may not amend her complaint as a matter of
course.

Because Galloway opposes the motion to amend, plaintiff

must obtain the Court's leave to amend her complaint.
Although leave to amend "shall be freely given when justice
so requires," it "is by no means automatic," and the decision
"lies within the sound discretion of the district court."

4

Parish

Plaintiff relies on a earlier version of Rule 15 in
arguing that she may amend as a matter of course until Galloway
files a responsive pleading. Since 2009, Rule 15 terminates the
right to amend as a matter of course 21 days after the filing of
a Rule 12(b) motion to dismiss. See Fed. R. Civ. P. 15, advisory
committee note.
5

v. Frazier, 195 F.3d 761, 763 (5th Cir. 1999) (quoting Little v.
Liquid Air. Corp., 952 F.2d 841, 845-46 (5th Cir. 1992)).

A

district court "acts within its discretion in denying leave to
amend where the proposed amendment would be futile because it
could not survive a motion to dismiss."

Rio Grande Royalty Co.

v. Energy Transfer Partners, L.P., 620 F.3d 465, 468 (5th Cir.
2010) (quoting Briggs v. Mississippi, 331 F.3d 499, 508 (5th Cir.
2003)).

Moreover, the Fifth Circuit has suggested that a party

may not amend the complaint after entry of a Rule 58 final
judgment.

See Whitaker v. City of Houston, Tex., 963 F.2d 831,

835-36 (5th Cir. 1992).5

Nor could plaintiff satisfy the

requirements for setting aside the judgment under Rule 59(e) or
Rule 60(b), and plaintiff has not sought such relief in any
event.

5

See Ross v. Marshall, 426 F.3d 745, 763 (5th Cir. 2005)

In Whitaker, the Fifth Circuit observed:

As no Rule 58 judgment was entered in this case, we are not
directly concerned with the effect of entry of a Rule 58
judgment on the plaintiff's option to file a motion for
permissive amendment. Nevertheless, we note that
post–Czeremcha decisions in the Eleventh Circuit have held
that once a Rule 58 judgment is entered amendment of the
complaint is no longer possible; but conversely, in the
absence of a Rule 58 judgment, no definite time period
exists within which the plaintiff must file his or her
motion to amend. Such a Rule 58 dichotomy is fair to both
plaintiffs and defendants: "If a defendant fears that a
plaintiff will unduly prolong litigation by filing amended
complaints far into the future, the defendant can move that
the district court enter final judgment."
(citations omitted).
6

(holding that a Rule 59(e) motion must must “clearly establish
either a manifest error of law or fact or must present newly
discovered evidence" and "cannot be used to raise arguments which
could, and should, have been made before the judgment issued")
(quoting Simon v. United States, 891 F.2d 1154, 1159 (5th Cir.
1990)); Kennedy Marr Offshore Singapore PTE Ltd. v. Techcrane
Int'l Inc., CIV.A. 12-1985, 2013 WL 5701664 (E.D. La. Oct. 18,
2013) (listing the limited circumstances under which Rule 60
permits relief from a final judgment and noting that such relief
"will be afforded only in unique circumstances") (internal
quotation marks omitted) (quoting Pryor v. U.S. Postal Serv., 769
F.2d 281, 287 (5th Cir.1985)).
Even if the Court's entry of Rule 58 judgment in this case
did not preclude permissive amendment, leave to amend is not
warranted because amendment would be futile.

The proposed

amendments make no new allegations regarding Galloway's contacts
with Louisiana.

At best, the attached exhibits support

plaintiff's original assertion that the New Orleans branch office
of the Internal Revenue Service participated in the effort to
collect unpaid taxes from plaintiff's ex-husband.

They do not

demonstrate that Galloway interacted with anyone in the New
Orleans office, much less that he purposefully directed his
activities at Louisiana or availed himself of Louisiana law.
Were plaintiff granted leave to amend, her complaint still would

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not survive a motion to dismiss for the reasons articulated in
this Court's order dismissing the original complaint.
Accordingly, the Court finds no basis for permitting amendment.

IV.

CONCLUSION
For the foregoing reasons, the Court DENIES plaintiff's

motion for leave to amend.

New Orleans, Louisiana, this 13th day of November, 2013.
___

_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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